Protecting Benefits While Securing the Future
A special needs trust (SNT) is a powerful legal tool that allows you to leave money or assets for a loved one with a disability — without disqualifying them from receiving Supplemental Security Income (SSI), Medi-Cal, or other means-tested government benefits. Getting the details right is critical, and this is one of our most important specialties at MVP Law Group.
Leaving money directly to a person with a disability — in a will or beneficiary designation — can immediately disqualify them from SSI and Medi-Cal. A properly drafted special needs trust prevents this and protects their benefits for life.
Third-Party Special Needs Trust
Created by a parent, grandparent, or other family member to hold funds for the benefit of a person with a disability. This is the most common type. The trust holds inherited or gifted funds. Leftover funds after the beneficiary's death go to named remainder beneficiaries (the family). No government payback required.
First-Party (Self-Settled) Special Needs Trust
Holds assets that belong to the person with a disability — such as a personal injury settlement or inheritance received directly. Allows them to qualify for benefits while retaining their own assets. Required to name the state as a payback beneficiary for Medi-Cal costs upon their death.
Pooled Special Needs Trust
Managed by a nonprofit organization. A practical option for smaller trust amounts. Individual accounts are pooled for investment purposes but maintained separately for each beneficiary.
ABLE Accounts
A tax-advantaged savings account for qualified individuals with disabilities (disability onset before age 26). Not a trust, but often used alongside an SNT for day-to-day expenses.
What an SNT Can Pay For
- Education, tutoring, and job training
- Supplemental medical and dental care not covered by Medi-Cal
- Technology, communication devices, and adaptive equipment
- Recreation, travel, and entertainment
- Personal care attendants beyond government-covered hours
- Transportation and vehicle modifications
- Home modifications for accessibility
- Advocacy and legal services
What an SNT Cannot Pay For
An SNT cannot be used to pay for items that would replace government benefits — such as food and shelter — without reducing those benefits dollar for dollar. The trust must be drafted carefully to ensure every distribution preserves eligibility. This is why working with an experienced special needs trust attorney matters enormously.
Our Process
Every family's situation is unique. We take the time to understand yours before we draft a single word.
Benefits Analysis
We review your loved one's current benefits and the impact of various funding scenarios.
Trust Design
We draft the trust to match your family's specific goals — accounting for the type of disability, expected trust assets, and family dynamics.
Document Execution
We walk through the complete trust document with you before signing. We ensure it is properly executed and ready to receive assets.
Coordination & Funding
We coordinate with financial advisors, life insurance planners, and retirement account administrators to ensure the trust is properly funded and named as beneficiary where appropriate.
Frequently Asked Questions
Common questions from families planning for a loved one with a disability in Encino and Los Angeles.
A properly drafted SNT does not affect SSI or Medi-Cal eligibility because the trust assets are not considered the beneficiary's "countable resources." The key is that the trust must be structured correctly and distributions must be made appropriately. This is not a DIY project — the rules are exacting.
You can, but it may harm them. A direct inheritance can disqualify them from SSI and Medi-Cal. Instead, leave the funds to a properly structured special needs trust — either one you establish during your lifetime or a testamentary SNT created by your will.
A trustee must be someone who understands both the beneficiary's needs and the complex rules governing SNT distributions. Options include a trusted family member (with clear guidelines), a professional trustee, or a pooled trust managed by a nonprofit. We help you evaluate the right choice for your family.
For a third-party SNT, remaining funds go to the remainder beneficiaries you named (typically other family members) — with no government payback requirement. For a first-party SNT, the state must be repaid for Medi-Cal expenditures from remaining trust funds.
Not usually — a trust that does not meet the SNT requirements cannot simply be relabeled. However, in some cases, a court can modify an existing trust. If you have an existing trust that names a person with a disability as a beneficiary, contact us to review whether it adequately protects their benefits.